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Example of a checking account statement for a fictional bank.Image via WikipediaDo you balance your checkbook every month?

It always seemed like way too much work to me. I didn’t always keep track of my checks, let alone balance my checking account.

That was until the bank called me one day to tell me that my account was overdrawn. Granted, it was only $20 over, but still it was very embarrassing and I decided right then that it would not happen again. I now balance my checkbook every month.

And you know what? It was not as hard to do as I thought it would be.

Here are three great tips to make balancing your checkbook easy:

Tip #1: Keep track of all of your expenses and income.

Including all electronic checks, direct deposits and bill pay tools. Using your checkbook register, a simple spreadsheet program, or a simple home accounting software package, you can easily record every transaction.

You could keep a folder where you can write each transaction on a little post-it note or on a scrap piece of paper. Put all your post-it's, scrap pieces of paper and receipts into the folder. Once a week, take this folder and enter the information onto your spreadsheet. This information is useful when you have a discrepancy between what you think you have in your account and what the bank tells you.

Tip #2: Use the worksheet your bank provides to balance your account every month.

This worksheet is straightforward and anyone can use it. The worksheet begins by asking your for your ending balance from your bank statement. You then add any deposits and subtract any expenses that are not on your statement and you should come up with a match with the balance you have in your checkbook register or on your spreadsheet.

By tracking your expenses and deposits as suggested in tip #1, all of your information is at your fingertips and finding any discrepancies is quick and easy. This way discrepancies are less common and it will take you less than ten minutes to balance, if you do it monthly. The longer you wait to balance your account, the more information you’ll have to go through and the more likely it is you’ll have errors.

Tip #3: If you do find any errors, take a look at your math first.

It is easy to accidentally hit the wrong number on your calculator or to forget to carry your 1.

Other common math errors can include the following:

basic addition and subtraction
reversing numbers
subtracting a deposit
automatic payments not deducted
ATM/debit card transactions not deducted
fees or dividends not accounted for

Don’t wait until you experience the same situation I did before you start balancing your checkbook. Spend a few minutes every month and do it right. You’ll be very glad you did.

Recommended: Guide to Family Budgeting

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  1. Rebecca // 4/21/2008 6:15 AM  

    Quicken is a program I can't recommend enough for seeing where the money comes and goes. It's great for catching bank mistakes too! My sis would never believe banks make mistakes so I left her to spend 5 hours trying to balance her statement...after which she took it to the bank and they informed her a check had been mis-validated. I loved that 'I told ya so' :) (so hard to get an older sis to listen to ya )